Bankruptcy Chapter 7 & 13

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Property You May Lose
Chapter 7 Liquidation Bankruptcy

In Liquidation Bankruptcy, the court appoints a Trustee who is able to take anything that you own which is not exempt.  [11 USC �541 et seq.; 11 USC �701 et seq.]

Chapter 13 Debt Adjustment

In most cases, Debt Adjustment allows you to keep everything that you own. If you own property which is not exempt, it may affect the amount or length of your plan payments.  [11 USC �1301 et seq.]

What does "exempt property" mean?  For bankruptcy purposes, "property" is anything which can be owned.  It includes real property such as your home or land, personal property such as household goods and vehicles, and intangible property such as bank accounts, stocks, bonds, etc.  "Exempt property" is property protected by law from the reach of creditors, or the Trustee in a bankruptcy. 

What property is exempt? The Bankruptcy Code gives you the choice of exempting property from a list given in the Bankruptcy Code, or from property exempt under the laws of the state in which you live when you file, unless your state laws do not allow the use of the list in the Bankruptcy Code.  [11 USC �522(b)(1)]

Property exempt to Arizona residents.  This links to a list of property exempt under Arizona law.  Arizona does not allow residents to claim exempt property listed in the Bankruptcy Code.

List of Exempt Property under the Bankruptcy Code.  The Bankruptcy Code's exempt property is listed in 11 USC �522(d).

If you have lived in your state for less than 730 days (2 years):  You may choose only the exempt property allowed in the state where you resided for the majority of the 180 days before the 730 days.  [11 USC �522(b)(3)]

If you have lived in your state for less than 1,215 days (3 years, 4 months): Your homestead exemption is limited to . [11 USC �522(p)]

Other exemptions and limitations on exemptions which are too complicated to describe here may apply.  You should consult a qualified attorney before taking any action.


This page was last revised: 02/18/09